Insurance coverage during a crisis: How your business insurance is affected by the Coronavirus.


  • Assistance programs are available for businesses affected by the Coronavirus that are unable to pay their monthly premiums.
  • BOPs are unlikely to recognize the Coronavirus as a compensable business interruption. 
  • Workers compensation coverage and premiums may be affected when employees are working from home.

Businesses of all sizes are feeling the effects of the coronavirus, leaving businesses owners wondering if insurance is going to cover losses caused by the pandemic. Many businesses have been forced to adjust or suspend operations, raising concerns about premiums, workers comp, lost income and more. CyberPolicy’s team of insurance advisors have been actively fielding questions from business owners all over the country about their policies and have outlined answers to the most commonly asked questions below:

General business insurance questions:

Q: What if I’m unable to afford my current insurance premium payment?

A: Depending on the type of policy you have, there may be options available.

Many of our carrier partners are offering flexible payment options for insureds such as adjusted payment schedules, waiving billing or late fees, and payment deferrals. In addition, some carriers are offering a 60-day voluntary hold on cancellations and non-renewal notices. Contact your insurance carrier’s billing department to see what they are offering.

Q: If my business is deemed non-essential and I’m forced to close, can my coverage be paused and then restarted once the city, county, or state orders are lifted?

A: Unfortunately, the answer is no. 

Your policy terms are predetermined at the time of purchase (typically 12 months). Pausing and restarting your policy would extend the policy and coverage terms. This presents an issue for insurers that must adhere to guidelines set by their respective state’s departments of insurance. However, most of our carrier partners are offering payment options.

Q: Is the Coronavirus covered as a business interruption? 

A: Business income forms typically exclude any coverage for viruses and bacteria. There must be direct physical damage to covered property in order to trigger business income coverage. Therefore, loss of income due to a quarantine, travel ban or business shutdown caused by COVID-19 would not trigger coverage. Please refer to your insurance policy for detailed specifics.

Ultimately, neither our agents, carrier underwriters, nor customer service teams can determine coverage. Policyholders who believe they have a COVID-19 claim should contact their respective insurance carrier’s claims department.

Q:  Can I buy business interruption insurance that would cover COVID-19 now?

A: It’s very unlikely. 

Prior to the Covid-19 pandemic, there were very few carriers in the insurance market that offered coverage specifically addressing viral contaminants and pandemics for business interruption. Carriers that do offer that coverage will likely suspend writing any policies in the near future. It is also important to note that any policy purchased to address COVID-19 specifically would exclude coverage for prior and/or potentially future events related to COVID-19.

Q:  My employees are now working remotely and have become reliant on 3rd party applications or software to stay connected.  Will our insurance cover a security breach caused by a 3rd party app or software?

A: If you have a comprehensive Cyber Insurance policy in effect, there is a strong possibility you will have coverage. However, you would need to review your current policy to determine what coverage and coverage limits are in place and under what circumstances coverage is triggered.  

Q:  My business has drastically slowed down because of COVID-19. Therefore, I’ve begun to offer additional services to maintain operations. Am I still covered?

A: It depends.

Policy premium and/or eligibility are subject to the business operations and/or services your business provides at the time you originally applied for and purchased your insurance policy(s).

Call your insurance agent or insurance carrier(s) directly to discuss whether any operational changes or new services being offered will affect your current policy(s). 

Workers compensation questions: 

Q. All of my employees are now working from home due to the stay at home orders. Do I still need workers compensation?

A: Yes.  

Business owners are required (subject to state laws) to carry workers compensation if their employees are permitted to perform work and on payroll, regardless of the location. A lack of coverage may result in fines.

It is important to note that there is still potential for workers comp claims to be filed by employees even if they are WFH.  If you do not have a workers compensation policy in place, the financial responsibility falls on the business owner

Q.  With all my employees now working from home, will my workers compensation premiums be affected?

A: The rates you pay are determined by the amount of payroll and employee classifications which are based on their work roles. Workers compensation is an auditable policy and is typically audited on an annual basis at the end of the policy term. A shift to employees working from home, may result in a change in your premium at audit. We recommend that you contact your agent or carrier to advise the best course of action, or adjust your payroll or worker classifications.

Q: Are my employees or myself covered by workers compensation if we contract coronavirus? 

A: For the Coronavirus or any virus to be covered by workers compensation it must be established that contracting the disease was work-related. In other words, there must be strong evidence to prove that contracting the virus was a direct result of performing one’s job duties. Claims of this nature may be scrutinized more heavily by an adjuster if you are a business owner filing a claim for yourself. Since business owners are typically responsible for the occupational conditions of their business.

However we recommend visiting your respective states workers compensation board website.  As some states are beginning to file emergency rulings expanding workers compensation coverage and benefits for essential businesses and their workers due to COVID-19.  

Q: Are COVID-19 claims compensable through workers compensation?

A: The carrier will investigate each COVID-19 claim on a case-by case basis. A team of specialists will investigate each claim and evaluate whether an employee’s contraction of COVID-19 occurred during the course and scope of employment. As with any claimed occupational disease, the medical evidence will be important to the compensability determination.

Q: My business is closed because of COVID-19, no employees are working and no employees are getting paid. Should I cancel my workers compensation policy?

A: If your business is closed permanently, no further work will be performed and no employees will be paid again, then it is acceptable to cancel your policy. However, if you plan to reopen or have employees perform any work during the remainder of the policy term, the policy should be kept in place. Workers compensation insurance premiums are based on payroll, not time. If your business has no payroll for a period, that will be taken into account during your next premium audit.

A business will want to leave their policy in place so work can resume immediately when conditions warrant, without applying for a new policy. There are substantial penalties for operating without worker's compensation insurance when a business is legally required to have it. In addition, it may be more expensive to cancel a policy and be issued a new one when the business reopens. Every policy premium contains an “expense constant”, which accounts for the insurance company's cost of issuing a policy. The employer must pay this charge each time a policy is issued, so an employer's costs can actually be higher if it cancels the current policy and then gets a new policy instead of leaving the existing policy in force.

If your policy is up for renewal soon, you may want to discuss with your current carrier if a “pay-as-you-go” option is available. “Pay-as-you-go” is a premium payment program some carriers offer, that allows you to make smaller, more frequent premium payments by paying each payroll period. Premium is calculated from your business’s actual payroll figures and assigned classifications each time payroll is processed and submitted to your carrier.

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